Mar 19 2024: Bitcoin experienced a 5.7% drop on Tuesday, marking its largest one-day decline in two weeks, amid a selling spree affecting cryptocurrencies and other risky assets like stocks.
The price dipped 4.2% to $64,550, hitting a two-week low of $63,555, while ether also fell by 4.4% to $3,355.
Despite this decline, Bitcoin has seen a 52% increase in value since the beginning of the year, driven by investor interest in U.S. exchange-traded funds backed by spot bitcoin.
Last Thursday, Bitcoin reached a record high of nearly $74,000, prompting profit-taking activities. Additionally, a series of U.S. data releases suggesting a potential reduction in Federal Reserve interest rate cuts this year contributed to the selling pressure.
Over the past week, Bitcoin has dropped by nearly 9%, marking its largest weekly decline since last September. Ether also saw a 13% decrease following an upgrade to the underlying ethereum network.
However, not all cryptocurrencies experienced such weakness.
Smaller tokens, known as “altcoins,” have attracted significant flows of capital. For example, the solana network’s sol token surged 19% in the past week, while avalanche’s avax coin rose by 17%, according to Coingecko data.
Analysts at exchange Bitfinex noted, “In light of bitcoin’s recent all-time high and subsequent correction, we anticipate a period of market recalibration as investors seek equilibrium amidst unprecedented inflows into spot bitcoin ETFs.”
Flows of capital into the top 10 bitcoin ETFs have slowed in recent days, with $178 billion flowing into major ETFs on Monday, compared to well over $400 billion on several days last week, according to LSEG data.
